Oil refiner and marketer
Western Refining Inc.
) has recently increased its quarterly cash dividend payment by
50% to 12 cents per share, up from 8 cents per share paid in the
fourth quarter of 2012. The new dividend will be paid on Feb 14,
2013, to shareholders of record as on Jan 30, 2013.
Importantly, the latest payout marks the second dividend hike by
the downstream operator since the first quarter of 2012. If the
current dividend is maintained for the rest of the year, the
annualized dividend payout of the company would be 48 cents per
Based on the closing price of $30.95 as on Jan 16, 2013, the
proposed dividend affirms a yield of 1.6%. A steady dividend
payout facilitates the long-term strategy of the company to
provide attractive risk-adjusted returns to its stockholders.
The dividend hike reflects continued strong performance by the
company, backed by solid operating results, good investments and
a diligent execution of its strategic plan. We believe that the
company will be able to generate sufficient cash flows for its
shareholders in the coming years, which will likely be backed by
strong operating performances and good management decisions.
Incorporated in 2005, El Paso, Texas-headquartered Western
Refining is an independent refiner and marketer of refined
petroleum products in the Southwestern and Mid-Atlantic regions
of the U.S. It is also one of the largest independent oil
refiners in the U.S. The company operates in three
segments, namely, Refining, Wholesale, and Retail.
Western Refining currently retains a Zacks Rank #3 (Hold),
implying that it is expected to perform in line with the broader
U.S. equity market over the next one to three months.
The company's easy access to the lower-priced West Texas
Intermediate (WTI) crude gives a cost advantage, which is
reflected in the company's high gross margins vis-à-vis its peers
Valero Energy Corp.
On the flip side, the inherent volatility of the refining
business reduces the accuracy and reliability of long-term
earnings and revenue estimates of the company. Additionally,
results are exposed to unplanned shut-downs that may have a
TESORO CORP (TSO): Free Stock Analysis Report
VALERO ENERGY (VLO): Free Stock Analysis
WESTERN REFING (WNR): Free Stock Analysis
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